Ask a VC: SheWorx100 VC’s On What You Need to Know Before Approaching Investors
On Wednesday, April 6th, SheWorx100 Series attendees will have the opportunity to present a pitch of their company to VC associates in intimate breakout sessions. Here’s what they want you to know before coming in.
What’s one skill or concept that any entrepreneur, no matter what experience level or industry, should adopt?
Multitasking and delegation
Adaptability
Good judgment
NETWORKING. Being able to work and meet with people along with being able to pitch your product(s) and yourself. That tactic can get you far in so many ways. That said, also it’s approachable networking where you’re also listening and building on the conversations.
Talking to customers/users and listening to what they’re saying (or not saying) about how your product makes them feel. It’s important to have a large enough sample size of feedback. You should make product and business decisions based on trends, not individual data points.
Sales — every founder needs to be able to sell at the end of the day. They need to be able to sell themselves to investors, their company to potential employees, and their product to potential customers!
Self-awareness. Knowing your own strengths and weaknesses will allow you to leverage them or tamper them as needed and identify gaps so you can build a team around you with complementary skills.
What’s something you wish entrepreneurs would think *less* about?
Fundraising.
What others, including investors, think about them and their startups.
Less about the image and more about the substance.
Valuations. Focus on your product and business. Work backwards on your model to figure out how much you need. The market will determine your valuation.
What is the biggest mistake you see entrepreneurs make when pitching?
Having done absolutely zero homework on the investor before pitching.
Lacking passion. I love it when people get excited.
Showing the wrong metrics for their business.
Trying to answer every question. Don’t try to!! You won’t have the answer for everything!!
Hiding information through weird acronyms and using alternative KPIs.
They come to the meeting unprepared about our fund.
Unfortunately some entrepreneurs intentionally misconstrue/exaggerate facts or metrics, thinking that we won’t eventually find out the real information.
Rambling. Do not ramble when asked a direct questions about a KPI or revenue item. Often it comes across as evasive, even if that’s unintentional. Another mistake that shouldn’t be a mistake, as it would just take research before, would be not considering indirect competitors as well as direct competition to your company.
Spending 10 minutes telling me how big the market is! We invest in a few sectors that we know well and see everyday, which gives us familiarity with the size of the market. I’d rather spend more time talking about your product or service.
Not understanding their competition. A lot of people start companies based in a pain-point or an area of expertise or study. A deep dive on the landscape before starting the company to really understand why they can do it better, faster, cheaper is critical. Not enough founders understand the landscape in depth.
Assuming that the problem they’re trying to solve is clearly understood by everyone in the room. Spend more time communicating what the problem is and why you’re the best person to solve it. It’s a really simple point, but something that often gets lost in the pitch deck.
What is a question that you wish entrepreneurs would ask you more often, or think about more?
Can I sit down with you for quick feedback on where I’m going with my business?
The amount of money to raise and which investors to raise from.
How can we help them grow their business through our network.
It’s great to see entrepreneurs thinking about how to grow and develop their people. When you do find entrepreneurs who care about this, you can see the results throughout their company.
I wish entrepreneurs would think more about the reasons they’re raising money and from whom they are raising it. Raising capital is a difficult process and distracts from the core business. If you absolutely do not need to raise money, then do not do it. If you absolutely need to raise money then make sure you’re working with investors who have conviction in your ability to build a business and can provide value to you as an entrepreneur.
I wish entrepreneurs would be more sincere and upfront about their concerns on the risks of their business. That shows a level of thoughtfulness in addition to the expected outsized ambitions of a start-up founder. Also, and actually this is more important — tell me why your business is VC-scalable. In a straightforward way, why is throwing cash into your business unlike throwing cash at a services based, cash-driven business? There are good businesses and VC-backable ones, and we’re trying to invest at that intersection!
What’s the most common question you get asked as an investor and what is your usual answer?
How quickly can you move on potentially investing? I say average is 4 weeks but we will respect the founder’s timeline.
What do we invest in? Early stage software / internet and hardware companies
What are the metrics I need to hit in order to raise a seed round? The answer is that as the entrepreneur you should be telling investors what are the important metrics to understand and why the current levels you’re hitting are impressive.
What’s your process? My typical answer is that we don’t have a strict process. We are balance sheet investors so we can tailor our deal-making process according to what needs to be done. We’ve never let a timeline hold us up from doing a deal we really wanted to do. At the same time, we are careful and thorough.
SheWorx is a global collective of ambitious female entrepreneurs and changemakers redefining the next wave of leadership.
The SheWorx100 Series: Fundraising on Wednesday, 4/6 is sold out. Please sign up for our waitlist if interested.
RSVP for our next SheWorx Breakfast Wednesday 4/13 with Divya Narendra, the Founder and CEO of SumZero. We will be discussing how to successfully market and scale online networks.
